Europe's big creditor governments are pushing for private investors to bear part of the cost of a new bailout of Greece amid mounting anxiety in the financial markets that the continued indecision would exacerbate the eurozone crisis.

With Italy, the eurozone's third biggest economy, being targeted by the financial markets for the first time in Europe's 18-month debt crisis, ECB warnings of contagion if Greece is allowed to default gained in credibility.

Italian borrowing costs hit their highest levels in more than a decade of 5.7% while the yields, or borrowing rates, on Spanish government bonds reached 6% – the highest levels reached since the creation of the euro.

Antonio Vigni, Banca Monte dei Paschi's managing director, said: "There has been a speculative attack on Italy in the past few days which is not justified by the fundamentals of either the country or the banks."

Dealers reported a race to "safe havens" and gold priced in euros and sterling reached record levels of €1,110.48 and £979.89 an ounce in early trading before falling back, while the euro hit a record low against the Swiss franc – a safe-haven currency. Wall Street was also caught up in the anxiety, with US stocks falling 1% in early trading, while the FTSE 100 was also 1% lower.

Analysts say there is little hope of calm returning to the markets while eurozone governments are gridlocked over how to respond despite weeks of negotiations with Greece's private creditors and various contradictory schemes being mooted and then rejected. Berlin's preference for a Greek debt swap, entailing "haircuts" for investors, was back on the table.

Eurozone finance ministers met in Brussels deeply divided in a fresh attempt to thrash out a deal. Earlier in the day, amid a mood of worsening pessimism that the governments would be able to forge a consensus, Herman van Rompuy, the European Council president, convened a special session with the ECB chief, Jean-Claude Trichet, José Manuel Barroso and Olli Rehn from the European commission, and Jean-Claude Juncker of Luxembourg, the president of the Eurogroup of 17 countries.

All the signs were that the hardline northern creditor countries bankrolling Greece – Germany, the Netherlands, Austria and Finland – had run out of patience and options and would now countenance a "selective default" for Athens.

"Substantial private-sector involvement is for the Netherlands and Germany a precondition," said the Dutch finance minister, Jan Kees de Jager, emphasising that investor participation, whether voluntary or not and whether triggering a Greek default or not, was paramount.

"We still pursue a voluntary basis, but some ratings agencies will see any substantial participation maybe as not completely voluntary. We do pursue a voluntary basis but it has to be substantial private-sector involvement. That's our commitment and also our parliament demands it." Signalling that default was now conceivable, he added it should be "for a very short period".

The emerging consensus within the German-led camp is that private investors have to take losses on Greece, which is then temporarily and briefly declared to be in default in the hope that this still does not trigger a "credit event" and turmoil on the credit default swap markets.

The Greek finance minister, Evangelos Venizelos, said: "I'm ready to participate in a substantial and constructive discussion on private-sector involvement."

Last week two of the three big ratings agencies predicted a Greek-style scenario for Portugal, downgrading its debt to junk, while predicting that any private-sector involvement in the second Greek bailout being negotiated would be viewed as a default.

Those verdicts provoked rage from the EU. Viviane Reding, the EU justice commissioner, said: "Europe can't allow three private US enterprises to destroy the euro."

Either their "cartel" was smashed or "independent" European and Asian ratings agencies would be set up. "We can't have a situation where a cartel of three US enterprises decides the fates of entire national economies and their citizens," she said.

Last week's announcements from Moody's and Standard & Poor's have also shifted the terms of the dispute. The eurozone had been discussing a complicated French proposal to roll over privately held Greek debt, mostly for 30 years, in the hope of avoiding a default declaration.

If that scheme is likely to be to be declared a default anyway, the German-led core decided, they might as well revert to a previous German proposal to swap maturing debt for new seven-year pledges, also resulting in default.